Outside the (big) box

Store vacancies pose challenges, opportunities for regional malls

Evolving consumer habits, including more shopping done online or in small, specialized shops, are changing shopping malls throughout the country and right here in the New North.

Shopping malls have been a part of American life since the Southdale Mall opened in 1956 in Edina, Minn., with mall construction peaking in the late 1980s with 3,000 malls located throughout the country. Today, there are about 1,100 malls, and Credit Suisse estimates that one in four malls currently open will close by 2022.

The reasons for the decline include an increase in online shopping, a widening wealth gap and changing tastes as consumers seek out stores that focus on one area versus the large department store that sells everything from clothing to appliances. Large brand-name anchor outlets have been hit particularly hard, with Bon-Ton shutting down altogether, Sears declaring bankruptcy, and JCPenney and Macy’s announcing the closure of stores in markets across the country.

And when anchors leave, it can be hard for malls to find a replacement, leaving thousands of square feet empty. (Smaller retailers also are closing their stores inside malls, such as Payless Shoes and RadioShack, which leads to empty storefronts inside the malls.)

In the New North, only three enclosed mall properties with a sizable number of tenants remain: Bay Park Square Mall in Ashwaubenon, Fox River Mall in Grand Chute and Forest Mall in Fond du Lac. Other malls in the region have not been so lucky, with Memorial Mall in Sheboygan closing (the site is being redeveloped for a Meijer store); Green Bay’s East Town Mall struggling to find new options and tenants; Manitowoc’s Lakeshore Edgewater Plaza eyed for redevelopment after its lone anchor, Younkers, closed; and Valley Fair Mall in Appleton knocked down to make way for a grocery store and office space.

“We are in the middle of so many redevelopments,” says Les Morris, manager of corporate public relations at Simon Property Group, which manages Bay Park Square Mall. “We’re excited. Of course, we have stores that didn’t make it, but we feel like we can definitely repurpose those spaces for higher and better uses.”

Bay Park Square Mall has more than 700,000 square feet of leasable space including anchor stores Kohl’s and Shopko, 90 specialty stores and a 16-screen movie theater. The mall, however, lost two anchor stores when Bon-Ton closed its Younkers and Younkers Furniture Gallery.

Where it makes sense, the Simon Property Group has started to add non-traditional elements to the retail mix in the approximately 200 properties it owns around the world, Morris says.

“Depending on the property, we’ve started to include residential, hospitality and more restaurant entertainment elements,” he says. “We think these (types of tenants) super-charge the centers as a place that’s much more attractive than what was there before.”

For example, Simon’s Southdale Mall — the nation’s first mall — now has a Homewood Suites hotel.

Owned by Brookfield Properties Retail Group, the Fox River Mall is the largest mall in the state with a total of 1.2 million square feet of leasable space. The mall has five anchors — Target, Macy’s, Sears, JCPenney and Scheels All Sports — but lost its sixth when Younkers closed earlier this year. NAI Pfefferle of Appleton is marketing that space forthe building’s owner.

At approximately 114,000 square feet, multiple interior and exterior entrances plus high visibility from Interstate 41, the space has a lot going for it, says Manny Vasquez, vice president of business development for NAI Pfefferle.

“Our client is definitely thinking outside the box,” he says. “We’ve been given the green light to reach out to tenants not typically considered in addition to retailers.”

“Mall owners and managers around the country have to think outside the box if they want to survive,”Vasquez says. “There’s still a lot of opportunity in these properties. Mall owners just need to attract shoppers who wouldn’t typically go to the mall. We’re looking for new ways to get them there.”

Fond du Lac’s Forest Mall is looking for new options after losing its Younkers, JCPenney and Sears, leaving the mall with just two anchors — Kohl’s and Staples.

Dyann Benson, development director for the City of Fond du Lac, says the property was “the place to be” when it was built in the 1970s. “We’ve started to see more significant changes in retail,” she says.

Dallas-based ATR Corinth purchased the mall a year ago, and Meijer has started its due diligence process to review the property, Benson says. “Fond du Lac is a good fit for them.”

In another sign of Meijer’s coming, the Fond du Lac City Council approved a special use permit to ATR Corinth for a gas station and convenience store under the Meijer name in July.

Benson says if Meijer decides to open a store in Fond du Lac, a part of the existing mall property would likely be razed to make room for the retailer while still providing space for the other mall tenants to remain.

Tourism, bargains drive success at Oshkosh outlet mall

Tourism drives revenue at almost every outlet center in the country, and The Outlet Shoppes at Oshkosh is no different.

The outlet mall is located just off Interstate 41 across from the Experimental Aircraft Association Aviation Museum and convention grounds. During the summer, a shuttle runs back and forth between the mall, EAA and the Oshkosh Convention Center to make it easier for people to shop.

“We do a lot of business thanks to tourism,” says Gina Slechta, regional marketing director for Michigan-based Horizon Group Properties, which owns the outlet mall.

The mall also is located near Ford Festival Park, where summer concert series such as Country USA and Rock USA are held.

“Oshkosh is such an event city,” Slechta says. “The city attracts more than 1 million people during the summer months, and whether they come to find a new outfit before the event or come just because they have some downtime, The Outlet Shoppes at Oshkosh want to provide the right experience for them.”

Outlet malls meet consumers’ basic needs, Slechta says.

“Consumers today are interested in saving money without sacrificing quality,” she says. “The outlet experience has always been about quality products at outlet prices.”

More than 40 retailers are located at the mall, including Columbia, Aeropostale, Tommy Hilfiger, Carter’s, Brooks Brothers, Eddie Bauer, Justice and The Gap.

The Outlet Shoppes at Oshkosh also is home to Wisconsin’s only free-standing Johnny Rockets restaurant.

Over the past few years, the shopping center has increased its retailer base and expanded stores for some of its more popular brands, Slechta says.

The Under Armour outlet is now twice its original size at 3,500 square feet. The Shoppes also added other stores including Michael Kors, Coach, Torid and a large selection of children’s clothing stores, Slechta says.

“We’re always looking for what the consumer wants,” she says. “We recently completed focus groups in the market area to directly ask the consumers what they’d like to see in a shopping experience.”

The Outlet Shoppes have made changes and improvements as a direct result of feedback from consumers, she says. During the past 10 years, Horizon Group has added a park area, a children’s play area and more seating in and around the shopping center.

“We’ve tried to provide a cleaner, more pleasing experience for shoppers,” Slechta says. “We’ve added more landscaping, more flower-scapes and continue to look for ways to update the center. People love to shop here, so we’re trying to do some additional things to enhance their experience.”

While all retailers have seen the shift toward more online sales, retailers located at The Outlet Shoppes report seeing an increase in business from online returns, Slechta says.

“Customers love instant gratification, so a lot of times our retailers see someone who purchased something online, wishing to return or exchange in their stores,” she says. “While each store has their own policy, they are typically able to accommodate and sometimes walk away with additional sales.”